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The daily drawdown is 2% of the account’s starting balance of the day. If your account
balance/equity falls below it will be considered a violation of the rules
The daily drawdown limit resets at midnight (Brokers Time)
Example 1: Imagine you start trading with a $50,000 account and your daily drawdown is
2% ($1000). If your account balance/equity falls below $49,000 at any point in a day it will
be considered a violation of the rules.
Example 2: Imagine you start trading with a $50,000 account and you gain a 2% ($1000)
profit. Your daily drawdown will then increase to 4% ($2000) for the given day. If your
account balance/equity falls below $49,000 it will be considered a violation of the rules.
Example 3: You have a $100,000 account, the maximum daily loss limit is $2,000, and you
have gained $1,000 in profit on that day. In such case, you will be allowed to lose $1,000
(your profit) + $2,000 (your daily loss limit) = $3,000 for that day only. The next day your
daily loss limit will reset and will be calculated from the starting balance of the day which is
$101k.
